2019 SUSTAINABLE DEVELOPMENT REPORT 1 www.remgro.com SUSTAINABLE DEVELOPMENT REPORT SUSTAINABILITY HIGHLIGHTS SUCCESSFUL PARTICIPATION IN THE FTSE/JSE RESPONSIBLE INVESTMENT INDEX “Our true power CONTINUED does not lie in our PARTICIPATION IN THE CARBON sameness, but in DISCLOSURE our rich diversity: PROJECT (CDP) diversity of fauna and flora; people CONTINUED MEMBERSHIP OF THE and cultures.” ETHICS INSTITUTE – Dr Anton Rupert OF SOUTH AFRICA OBTAINING OUR LEVEL 7 CONTRIBUTOR STATUS IN TERMS OF THE BBBEE SCORECARD www.remgro.com | Remgro Limited | Sustainable Development Report 2019 2 INTRODUCTION provides a better understanding of Remgro’s efforts on the Remgro’s value system incorporates the guidelines for doing social and environmental front in order to achieve its key business successfully drawn up by its founder, Dr Rupert, nearly objectives of maximising value creation over the short, medium 60 years ago. These guidelines include the following: and long term; while doing business ethically. Refer to the sustainability highlights on the previous page for Remgro’s • – because it lasts the longest Honesty external recognition and achievements during the reporting • Correctness – because it creates trust with friends period in this regard. and opponents • Courtesy – which means dignity without pride and EXTERNAL ASSURANCE friendliness without subservience We acknowledge the increasing requirements from investors • Service – in every respect to your client, your fellow human and regulatory and other guidelines, such as the King IV Report being, your country on Corporate Governance for South Africa (2016) (King IV) and the integrated reporting guidelines, for the external assurance • Mutual support – so that you push others up the ladder of of selected non-financial information. We further acknowledge success while climbing yourself, because if you pull others our accountability to our stakeholders to present information down, you will also fall that is relevant, accurate and reliable. In this regard it should be • Trust – the belief that all will work out well if everyone is noted that Remgro follows a combined assurance model, doing their duty incorporating management, internal audit and external Remgro believes that these values incorporate the spirit in assurance (e.g. BBBEE scorecard verification, Carbon Disclosure which it strives to be a good corporate citizen. From the above Project (CDP) verification), as illustrated in the table below. We it is evident that the three pillars of sustainable development, believe that these assurance methods provide the necessary namely economic, social and environmental sustainability assurance over the quality and reliability of the information practices, have always been part of Remgro’s core values. presented. The different options and levels of external Remgro intentionally interacts and responds to the assurance available are continuously being reassessed to opportunities and challenges presented by the dynamic system determine the way forward on external assurance. created by these three pillars and the capitals that Remgro uses, including the financial, manufactured, intellectual, human, MANAGEMENT’S APPROACH TO social and relationship and environmental capitals and, as part SUSTAINABILITY of its oversight function, the Remgro Board is alert to the Remgro’s Board is ultimately accountable for the performance viability of Remgro with regard to its reliance on the of the Company, appreciating that strategy, risk, performance aforementioned capitals. and sustainability are inseparable. In this regard the Board Remgro is fully committed to managing its business in a has delegated the general oversight and reporting of sustainable way and upholding the highest standards of ethics sustainability to the Audit and Risk Committee, assisted by the and corporate governance practices. While corporate Social and Ethics Committee. The role and function of these governance, risk and opportunities management and committees are dealt with in more detail in the Corporate technology and information governance are addressed in the Governance Report and the Social and Ethics Committee Corporate Governance and Risk and Opportunities Report on pages 66 and 104 of the Integrated Annual Report Management Reports, the Sustainable Development Report respectively. COMBINED ASSURANCE ASSURANCE OUTPUT BUSINESS PROCESSES ASSURED PROVIDER Independent external auditor’s Financial reporting PricewaterhouseCoopers Inc. report Internal audit reports Risk-based selection of audit areas Remgro Risk and Opportunities Management and Internal Audit Internal risk and opportunities All key business risk and Internal management reviews, assisted by management opportunities areas Remgro Risk and Opportunities Management and Internal Audit BBBEE contributor verification Broad-based black economic AQRate Proprietary Limited empowerment External calculation of carbon Carbon footprint calculation Carbon Calculated, assisted by an independent footprint consultant 3 www.remgro.com ETHICS COMPETITION AND COMPLIANCE COMPETITION The Group supports and adheres to the relevant competition ETHICS and anti-trust laws applicable in the various jurisdictions in The Board believes that ethical behaviour stems from which the Group operates. During the year under review no appropriate value systems inherent to the people in the enquiries regarding anti-competitive, anti-trust or similar Company’s employ as directed and supported by visual conduct were received which resulted in fines being levied. ethical leadership and a value-driven corporate culture. Leadership based on ethical foundations results in a culture of COMPLIANCE ethical and moral behaviour and compliance with laws, rules, During the year under review there were no incidents of material codes and standards. The Board therefore retains the non-compliance with any laws, regulations, accepted standards responsibility to establish and maintain a culture of honesty, or codes, and no fines were imposed in this regard. integrity, competence, transparency, fairness, responsibility and accountability in order to position the Company as an STAKEHOLDER RELATIONS investment partner of choice. This is underscored by ethical Our relationship with all our stakeholders is based on the leadership as ethics cannot be regulated but stems from following values that are entrenched and supported by personal conviction. Remgro’s Code of Ethics, and which values assist the effective leadership by the Remgro Board in achieving strategic In this regard the Company has adopted a Code of Ethics objectives and positive outcomes over time: (the code) that provides a framework of ethical practices and • Integrity, in acting ethically beyond mere compliance business conduct that are applicable to all directors and • Competence, in ensuring due care, skill and diligence are employees. The code is available to all employees on Remgro’s exercised in-house intranet and a copy is provided to all new employees. • Responsibility, for the assets and actions of the Company The code as well as a formal Gifts Policy also provide strict • Accountability, for justifying its decisions and actions to policies regarding gifts, invitations or favours received from shareholders and other stakeholders suppliers or any other parties. The offering of favours and/or • Fairness, in considering the legitimate interest of gifts to gain unfair commercial advantages is also strictly stakeholders prohibited. • Transparency, in disclosing information in a manner that The Group furthermore requires ethical behaviour from its enables stakeholders to make informed decisions about the suppliers and business partners and ensures that terms of Company’s performance and sustainability trade and related agreements enforce ethical behaviour along Remgro’s Board is the ultimate custodian of its corporate with responsible environmental consumption and compliance reputation and stakeholder relationships. In this regard a with legislation enshrining human rights. formal Stakeholder Policy sets out the approach and strategy of The Audit and Risk Committee monitors compliance with the Remgro with respect to stakeholder engagements, ensuring that the approach takes into account appropriate corporate code and addresses instances of fraud or irregularities. The governance guidelines. Group has an effective fraud prevention and detection process and ensures compliance and risk mitigation. No Remgro utilises a wide variety of communication methods to material investigations were concluded during the reporting ensure that its communication with stakeholders is clear and period. understandable, as well as transparent, balanced and truthful, and sets out all relevant facts, whether positive or negative. The Company has implemented an Ethics hotline to enable Care is taken to ensure that engagement with stakeholders is, any employee or other stakeholder to report knowledge of where appropriate, not just one-way communication but perceived and alleged irregular or unethical behaviour in a constructive, partnership-based engagement. This ensures confidential and controlled environment. The Ethics hotline is that all legitimate stakeholder expectations are identified and managed by an independent third party and is available on a addressed as far as possible. 24-hour basis. During the year under review one minor alleged Remgro, like other organisations, has an economic impact incident was received through the hotline which was found to on our stakeholders